HP Reports Small Revenue Gain, Initiates Company Transformation

“We’re focused on improving performance across the business,” said Léo Apotheker, HP president and chief executive officer. “HP is taking bold, transformative steps to position the company as a leader in the evolving information economy. Today’s announced plan will allow HP to drive creation of long-term shareholder value through a focus on fewer fronts, thereby improving its ability to execute, invest in innovation and drive a higher-margin business mix.”

Earnings highlights

For the quarter, net revenue of $31.2 billion was up 1 percent from the prior-year period as reported and down 2 percent when adjusted for the effects of currency.

GAAP diluted earnings per share (EPS) was $0.93, up 24 percent from $0.75 in the prior-year period. Non-GAAP diluted EPS was $1.10, up 2 percent from $1.08 in the prior-year period. Non-GAAP financial information excludes after-tax costs of approximately $0.17 per share and $0.33 per share in the third quarter of fiscal 2011 and 2010, respectively, related primarily to the amortization of purchased intangibles, restructuring charges and acquisition-related charges. Information about HP’s use of non-GAAP financial information is provided under “Use of non-GAAP financial information” below.

“Our outlook reflects the challenges that we face across our businesses,” said Cathie Lesjak, HP executive vice president and chief financial officer. “Dealing with these challenges will take time, but HP will navigate through the transformation to become a more focused, streamlined company.”

Trends and regional performance

HP’s Commercial businesses remain healthy with 5 percent revenue growth year over year. HP’s Consumer businesses, within PSG and IPG, were collectively down 15 percent year over year.

Third quarter revenue was flat year over year in the Americas as well as in Europe, the Middle East and Africa at $14.1 billion and $11.0 billion, respectively. Revenue in Asia Pacific was $6.1 billion, representing a 9 percent increase year over year. When adjusted for the effects of currency, revenue was down 2 percent in the Americas, down 5 percent in Europe, the Middle East and Africa and up 1 percent in Asia Pacific.

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